Dealonomics

‘Money isn’t the most important thing in life, but it’s reasonably close to oxygen on the “gotta have it” scale.’

Hilary Hinton ‘Zig’ Ziglar (American author and motivational speaker; 1926–2012)

The global economy is still a mess. Big business, aided by bad government in many cases, spoilt the party for everyone, yet it is the little guys – the individuals and the small businesses – who are really paying the price.

In January 2013, the World Bank released its biannual ‘Global Economic Prospects’ report, which examines worldwide economic trends. The report points out that it has been more than four years since the global financial crisis, but there is little hope of an improvement in the short term. Huge challenges still need to be overcome for the world to see a medium-term recovery.

Before you start arguing that it is only in the developed world that the future is bleak, and that the developing world is achieving significant growth, consider the following:

This book is not intended to be an economic treatise. There are minds far greater than mine who write continually on the subject of the global economy. My intention is merely to set the scene, to describe the economic reality in which we find ourselves, and to present ways in which we can earn the most in a bad economy – or a good economy, for that matter. We will look at how you, the individual, can claw back a semblance of control over your income, wealth and general wellbeing.

The harsh reality is that in a depressed economy, companies are not giving much in the way of increases, many are not replacing people leaving positions, large-scale retrenchments are commonplace, and new projects are not being awarded to contractors or entrepreneurs.

Large commercial companies are not spending money with small businesses because the customers of the large companies are tightening their belts, therefore the large companies have less money to spend on the specialist services offered by smaller enterprises. It’s a downward spiral, with the little guys at the bottom of the maul.

Those in the public sector are not much better off. They are told that there is zero room to increase their earnings, despite their basic salaries often being well below those of the private sector.

All the while, the price of essentials – food, transport, education, health care – is going up, yet individuals have less and less money to pay for the basics.

As a result, existing staff have to work harder for the same (or effectively less) money. Small contractors slave away on projects that bring them very little income. The ordinary person has developed a mindset of ‘lucky to have this job or contract’, or ‘need to keep a stiff upper lip’, and ‘grin and bear it’.

Everyman is getting poorer. But it does not have to be this way. If people know how to negotiate higher incomes or salaries, how to get their contracts signed or increased, their orders approved, or how to get hired, they can break out of this cycle. This is dealonomics.

Most of us who have worked in business understand the term ‘supply and demand’, but for those not familiar with business or economics, here is a simple definition from www.wisegeek.com:

Supply and demand is considered a basic economic concept, as well as a vital part of a free market economy. Supply is the amount of something, such as a product or service, that a market has available. Demand is the amount of the product or service that buyers want to purchase. The relationship between supply and demand has a good deal of influence on the price of goods and services.

In a bad economy, the supply of people – and we are talking about skilled, or at least semi-skilled, people here – is high. The result is that companies are spoilt for choice when it comes to hiring employees or contractors. Because of the over-supply of good people, companies can recruit the best skills, often at discounted salaries.

In times of economic growth, good skills are in shorter supply as employment rates are higher, so the employee gets to pick and choose which job to take and at what salary. The balance of power shifts in favour of the employee in this scenario.

Even in a bad economy, it is not all doom and gloom. The tools you will find in this book will serve you well, regardless of the economic situation in which you find yourself. So whether you need an increase but want to keep your job because the market is horrible, or if you are in demand because of your exceptional skills, here are the tools to get the most money you can for the value you are able to offer – how the ‘Salaryman’ can hit back.

The first time I came across the term ‘Salaryman’ was in the novel Death of a Salaryman by Fiona Campbell (definitely worth a read). It is a term commonly used in Japan for white-collar businessmen. Over time, the term has gained a somewhat negative connotation. Wikipedia says of the word:

Immediately following World War II, becoming a Salaryman was viewed as a gateway to a stable, middle-class lifestyle. In modern use, the term carries associations of long working hours, low prestige in the corporate hierarchy, absence of significant sources of income other than salary and karōshi – ‘death from overwork.’

For your interest, the feminine of ‘Salaryman’ is ‘career woman’ (source Wikipedia).

On the subject of ‘He said, she said’, the rest of the book will refer to ‘he’ or ‘him’ for both genders. In no way is this a suggestion that women are lesser superheroes than men: it simply makes for easier reading.

‘Salaryman’, for me, describes perfectly the way in which people who feel trapped in the corporate world see themselves – under-rewarded, overworked and dispensable. The trick for those among us who see our alter ego as Salaryman is to change this sense of being trapped into feeling that the corporate world is giving us what we want, need and deserve. I plan to shift your view of Salaryman to that of a hero or heroine – think superhero, like Superman or Wonder Woman. Someone able to fight the greedy, grasping villains of the corporate world who take hard-working salaried people for granted. I will call the baddies the ‘Wolves of Wall Street’.

Don’t dismiss being a Salaryman. Not everyone is cut out to be at the top of the corporate tree, or an entrepreneur, or a civil servant. Rising above the level of Salaryman to that of senior executive means participating in a dog-eat-dog world, with shareholders or a board of directors who can, and will, fire you on a whim. The money is not always worth it. Ask me, I can show you my scars.

Being an entrepreneur or contractor or small business owner is not for everyone either. It is incredibly lonely, you can’t bitch about the boss because you are the boss, if you don’t make any money for the month you starve, you lose contracts through no fault of your own and you continually run out of money trying to grow the business. Sounds like hell, doesn’t it? It can be.

Then again, being a civil servant can also be a nightmare, whether a teacher, nurse, soldier, fireman, worker in a government office or street cleaner. You are usually at the bottom of a long and political ladder, you have limited ability to be innovative or to change the environment in which you work, and in exchange for a low basic income, you are supposed to have job security. In theory.

During an interview with the Television Critics Association, Aaron Sorkin, the creator of the hugely successful American television series The Newsroom and The West Wing, made the following comment:

If 999 people like the show and one doesn’t, I will abandon those 999 people and try to get the one person to like me.

What struck me about this comment is its connection with self-worth. Why is it that we tend to focus on the negative comments of one person when so many others give us praise and recognition? Or we allow one or two rejections to get the better of us? Why should we feel less than worthy because someone, often a complete jerk, is unkind? This, dear reader, is the human condition. We believe the bad stuff.

The Wolves of Wall Street, the anti-heroes in our superhero analogy, want us, Salaryman, to believe that we are not worth much, that we are disposable commodities that can easily be replaced, that we are lucky to have the jobs they provide, and that we should give our lives and souls for our jobs. In fact, we should pay them for the privilege of working. Let’s test if the Wolves’ view is true.

Imagine you are no more than an average performer. You do what is expected of you during your work hours, and then go home. You do not put in extra hours or take on additional responsibilities. You do not cause trouble or rock the boat. You are a solid ‘three out of five’ in your performance evaluations – the original Mr or Ms Average. The Wolves decide to get rid of you and employ someone with, ostensibly, more to offer at the same salary.

What are the costs to the company that has decided to get rid of you? Firstly, there is a recruitment fee, and then there is the downtime while the new person learns the ropes at the company. For argument’s sake, assume the combined cost of the recruitment fee and the downtime is six months of your old salary. You have been replaced, at a loss to the company of six months’ salary, by someone who is untried and untested. Will they fit in or fight with everyone? How much management time will they consume? Will they be able to do the job better than you could?

In actual fact, the direct and indirect costs of hiring an external person to replace an outgoing employee are approximately one and a half times the annual salary for the position, not 50 per cent. More on this in Chapter 7 in the section on getting an increase or promotion.

It doesn’t take a rocket scientist to figure out that this may not be the best business decision the Wolves could make – and we are talking about an average performer.

Yet Salaryman believes the Wolves when they say that they could hire someone to take our place with the click of their fingers, and that we should be grateful for the less than satisfactory pay or working conditions.

We have been trained to think, by the Wolves in power, that we are not worthy, that we are dispensable. The tragedy is that we have believed them. We have set low expectations for ourselves and now think we do not deserve the best of the business world. Enough of that nonsense. It’s time for Salaryman to change his thinking.

Now imagine you are negotiating your salary. How could your power in the negotiation be improved by using the argument above about hiring and firing to show the cost to the company of your leaving? Simple dealonomics.

The scenario we explored above assumed you were an average performer threatened with being replaced. What, though, if there are two people vying for one position in a company? What happens then?

Put yourself in the shoes of the person who is going to make the promotion or hiring decision. Who would you choose? Mr Average, or the person with a good performance record?

You owe it to yourself – and yes, to the company that pays you – to be the best you can be in the environment in which you find yourself. It does not matter if you are an employee, an entrepreneur, a contractor, a business owner or an intern; giving your all and being the best you can be brings tremendous personal satisfaction.

And don’t kid yourself – being your best counts for a huge amount when someone is making the decision to hire you, promote you or increase your earnings, or give you the contract you want. Even when life kicks you in the teeth, knowing that you are doing your best enables you to keep your self-respect, and not to care about the one person who thinks you are unworthy.

What I’m about to say now is a little contentious, but it needs to be said. You are not responsible for funding a company by sacrificing any part of your salary or earning less than you deserve – unless you are a shareholder, of course.

If you give of your best, you have every right to expect to be properly rewarded for your effort. Don’t allow the Wolves to manipulate you into thinking that you must make sacrifices ‘for the greater good’.

It comes back to supply and demand. Companies have money with which to buy people, and people sell their sweat equity to companies for money. It is a straight trade – quid pro quo. In bad times, companies need the best people, not the cheapest people.

If the company for which you work is suffering financially, and you value the company and want to help them during the hard times, then work hard and give of your best. This is the greatest contribution you can make. Sacrificing any part of your earnings represents a mere drop in the ocean for the company.

As you can see, this book is not for people who want to earn a lot but skive off, or duck the responsibility they have to keep their end of the deal. It is for those who want to make a meaningful contribution and be fairly rewarded for it.

If you are not being properly rewarded, don’t be a crybaby. You have only yourself to blame. Take responsibility and stop being a victim. You are already taking ownership by reading this book. Good for you.

Google ‘Richest People 2012’. It doesn’t matter which site you visit, but try to figure out a pattern to the top 10 richest people. Do they all have tertiary education? No, fewer than half of the top 10 graduated from university. Are they self-made? Nine definitely, most likely 10. Are they all in one industry? No, lots of different industries. And sadly, all are men and none are Salaryman.

What is it that differentiates these super-performers from Joe Average? It’s an unshakeable belief in themselves and their capabilities, sheer determination, and probably a huge dollop of good luck.

An interesting article I came across while researching the Richest People list was from www.mindpowernews.com, titled ‘26 Successful People Who Failed At First’. This article illustrates the determination factor. Here are a few examples (edited):

Do you think these people were the hardest workers in the companies they built? Not necessarily, but their determination, their willingness to risk all and their immutable self-belief no doubt outstripped that of those around them by a country mile.

Not all of us have the desire or ability to be captains of industry. What we always have, though, is the opportunity to believe in ourselves and perform to the very best of our abilities.

A woman named Donna McCallum floats around Johannesburg and Cape Town with fairy wings and sprinkles magic as she goes (I mean this literally – have a look at Donna’s wonderful website www.fairygodmotherinc.com). Donna’s journey to becoming a fairy godmother is a fascinating one, starting with an epiphany she had on a bus in the middle of South America. But that is her story to tell.

Having met Donna through ‘serendipity’, as she would call it, I wanted to experience one of her workshops. I attended an evening session titled ‘Money Magic’, and was given a life lesson that contradicted everything I had been taught. The lesson?

WTF? My very foundation was rocked to the core. I knew that hard work was essential to earn money. I was living proof of this! I had worked hard and made a lot of money! Then I stopped to think about the people around me who worked exceptionally hard and did not have money, and slowly realisation dawned. There were people a lot more industrious than me who had almost nothing. I thought about the cleaners and clerks and managers and entrepreneurs who had eked out the most humble of livings, but who had sweated blood with their hard work.

What now? One of my most dearly held beliefs about money lay shattered around me. What should I believe about money instead?

Donna’s teachings are based on the relationship that people have with money, which is separate to the relationship they have with work. She shows how our beliefs concerning money have a profound effect on our ability to attract it. This coincides with law-of-attraction theories.

It sounded a bit ‘airy-fairy’ to me, but I was willing to give it a try. I wrote my attraction affirmation and, within a few days, my wish was granted. My affirmation was a bit off the mark – I was showered with lightning and rain instead of with money, but the lesson was clear enough for even a cynic like me to embrace.

Your attitude, and your belief that you deserve the best, plays a major role in whether you get what you want in life or not. If you don’t believe you are worthy or deserving, you will not be successful.

Hard work = Keep job = Increases = Recognition = Reward (Maybe).

But

Hard work ≠ Money.

How? That is the million-dollar question. How can we get higher salaries? How can we negotiate better contracts? How can we increase our income? How do we get that dream job?

There are certain laws – or call them rules or secrets or guidelines, if you prefer – to getting more money. Collectively, they constitute dealonomics, and they are described step by step in this book, with a quick and dirty summary in the last chapter. The laws are loosely divided into the following:

Once we have explored these five sections, we will focus on how to apply these laws to your specific environment, be it as an employee in the corporate world, a civil servant, a beginner, a woman, a stay-at-home mom or dad, a contractor or a small business operator.

Mostly, I have referred thus far to ‘getting more money’, but the same guidelines work for getting more of whatever it is that you want – a better contract, remuneration package, terms and conditions, benefits, promotion, recognition, rewards, whatever. The principles remain the same – to improve your lot in life, there are certain inalienable truths that govern the process.